This is how the dollar price opened in Colombia on June 29

The dollar started in Colombia on Wednesday, June 29, without much news compared to Tuesday’s closing price, after the turmoil caused by the markets with the election of Gustavo Petro, the country’s first leftist president. .

According to data from the Colombian Stock Exchange, The US currency opened on Wednesday at 4,090 pesospractically stable compared to the representative market price (TRM) set by the FSA for today: 4,089.72 pesos.

Regarding the closing price of this Tuesday, the first trading day of the week – since Monday was a holiday – the dollar recorded a slight decrease, as its price yesterday was 4,096 pesos.

However, this morning The US currency reached a maximum price of 4126.43 pesosWhile the minimum was 4,080 pesos, which was recorded in the first three minutes of operations on Wednesday.

We must remember that The dollar closed last June 24 with maximum pricesWhich it has not seen since March 2020. The dollar reached 4140.50 pesos, after an upward trend that started on June 16.

This price was achieved after the second round of the presidential elections, mainly affected by the volatility of oil prices and the uncertainty in global markets due to the slowdown in the US economy.

Andres Moreno, financial analyst and stock market, stressed that although the current market situation affects what is happening with the dollar in the Colombian market, the negative effects that come from abroad, with the weakness of oil and the US economy, must be taken into account. On the verge of stagnation.

The US currency reached a maximum price of $4,126.43. – Photo: BVC

Petro effect? The dollar in Colombia in the midst of a perfect storm

To the uncertainty created by the economic plan of the Petro government, many international factors were added that put pressure on the national currency, as well as its emerging counterparts. One is the fear of a possible recession in the developed world.

generally, Continuing inflation and raising interest rates by the Federal Reserve raises threatsKristalina Georgieva, Managing Director of the International Monetary Fund, said a few days ago, basically, that the United States is facing a recession.

In addition, the future of oil activity creates pressure on the dollar’s price. Given that crude oil is the largest source of foreign exchange in the country, and with less exploration and exports, fewer dollars will come in. This is even more serious if one takes into account that Colombia has a very negative index in its external accounts, known as the current account deficit.

The future of oil activity is also putting pressure on the dollar’s price. – Photo: Getty Images

This indicator shows that there are more currencies leaving the country (due to debt repayments or imports) than those entering for any reason (exports, remittances, foreign investment, etc.) and this deficit is close to 6% of GDP, which is a high level compared to the average Latin America of 1.1%.

The dollar immediately receives all these messages, and in the market the currency begins to move. This international context is crucial, however In Colombia, the devaluation was felt more than the neighborhood This is due to the political issue.

The advantage that Colombia had is that it was able to finance this deficit by entering foreign direct investment, only in the first quarter of this year it was 5,186 million pesos, but the problem is that most of this money comes for energy. Mining activities and if this industry fades, this investment will not come back up, and also affects the exchange rate.

With the election campaign in full swing, analysts were already anticipating a strong but short-lived reaction to the electoral event.

Despite the fact that after the results that gave Gustavo Petro the victory, many sectors met the elected president and removed doubts about what would happen, The level of uncertainty persists, but is more moderate. In fact, no scenario is completely excluded. All experts talk about the need to clarify who will take the public finance portfolio.

however, What could challenge the dollar the most is the global recession, Which, if produced, would raise the currency to a ceiling of 4,200 pesos. For market analysts at Alianza Valores, it will be “a temporary move as always in recessions.”

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